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Press release from Marketwire

Renegade Petroleum Ltd. Announces Closing of Strategic Asset Acquisition to Become Income Plus Growth Dividend Paying Corporation and Achieves 2012 Exit Guidance of 8,000 boe/d

Monday, December 17, 2012

Renegade Petroleum Ltd. Announces Closing of Strategic Asset Acquisition to Become Income Plus Growth Dividend Paying Corporation and Achieves 2012 Exit Guidance of 8,000 boe/d07:00 EST Monday, December 17, 2012CALGARY, ALBERTA--(Marketwire - Dec. 17, 2012) -THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.Renegade Petroleum Ltd. ("Renegade") (TSX VENTURE:RPL) is pleased to report that the previously announced acquisition (the "Asset Acquisition") of certain strategic light oil assets from a senior Canadian producer has closed. With the closing of the Asset Acquisition, Renegade significantly strengthens its asset base within its existing core area of southeast Saskatchewan. Key attributes of the Asset Acquisition include the following:3,600 boe/d of light oil production (94% light oil) with a stable, long life, low decline (18%) production profile; Strong capital efficiencies and top-tier operating netbacks provide significant free cash flow and ideally position Renegade for a sustainable income plus growth dividend model; Significant overlap with Renegade's existing southeast Saskatchewan assets provides Renegade with operational synergies; Key members of Renegade's operational team have had prior experience running the acquired assets; High working interest (86%) and high operatorship (83%); Up to 219 km2 of 3D seismic and 599 km of 2D seismic; Existing infrastructure, including process facilities, water disposal and storage capacity within Renegade's core southeast Saskatchewan areas providing operational synergies between Renegade's current asset base and the acquired asset base; and Significant low-risk development inventory of over an expected 240 (gross) low-risk development locations based on current mapping of which only 27 locations are booked.CLOSING OF FINANCING TRANSACTIONSIn addition, Renegade is pleased to announce that, further to its joint news release with Canadian Phoenix Resources Corp. ("Canadian Phoenix") (TSX-V: CXP) on November 16, 2012:Renegade and Canadian Phoenix have closed the plan of arrangement pursuant to the Business Corporations Act (Alberta) (the "Arrangement") pursuant to which, among other things, Renegade acquired $75 million in cash previously held by Canadian Phoenix; The aggregate gross proceeds of $70,745,105 from the previously issued 30,104,300 subscription receipts (the "Renegade Subscription Receipts") of Renegade pursuant to a bought deal short form prospectus offering have been released from escrow and each of the Renegade Subscription Receipts has been converted into a Renegade Share on a one-for-one basis; The aggregate gross proceeds of $114,256,800 from the previously issued 48,619,915 subscription receipts (the "Private Placement Subscription Receipts") of Canadian Phoenix Acquisition Corp. pursuant to a private placement offering have been released from escrow and each of the Private Placement Subscription Receipts has been converted into a Renegade Share on a one-for-one basis; and Concurrently with the successful closing of the Asset Acquisition and the Arrangement, Renegade entered into a new $325 million syndicated credit facility (the "Credit Facility"). The Credit Facility consists of a $275 million revolving facility and a $50 million operating facility. The syndicate of banks was led by National Bank Financial and TD Securities acting as Joint Bookrunners and Co-Lead Arrangers. National Bank of Canada will act as Administrative Agent for the Credit Facility.DIVIDENDSRenegade is pleased to announce that the Board of Directors of Renegade has declared a monthly dividend of $0.019167 per Renegade Share ($0.23 annualized) payable to Renegade shareholders of record on December 31, 2012, with an ex-dividend date of December 27, 2012 and a payment date of January 15, 2013. These dividends are designated as "eligible dividends" for Canadian income tax purposes.Renegade expects to declare regular monthly cash dividends. Based on the initial dividend and the pricing of each of the Bought Deal Offering and the Private Placement Offering of $2.35, this would provide an annualized yield of 9.8%.ADDITION TO BOARD OF DIRECTORSIn connection with the arrangement agreement pursuant to the Arrangement, Mr. Daryl Clark, BSc (Eng) MBA, has been appointed as a new independent director of Renegade. Renegade's Board of Directors and management team look forward to Mr. Clark's guidance and expertise.Mr. Clark is currently the Vice President and Chief Financial Officer and member of the board of South Asia Energy Management Systems ("South Asia"), a California corporation, and Ram Power Corporation. South Asia undertakes the development, construction, acquisition, ownership and long term operation of hydro-electric and other renewable energy projects in various international markets. Ram Power Corporation is in the business of developing, owning, and operating clean, sustainable, renewable geothermal energy projects in North and South America. From 2002 to 2007 Mr. Clark was Vice President and Chief Financial Officer for Peachtree Settlement Funding, a specialty factoring firm. Mr. Clark was instrumental in leading Peachtree during a period of time in which its revenues grew from $20 million to $180 million annually. In addition, Mr. Clark currently serves on the Board of Directors of Canadian Phoenix. Mr. Clark has a master's degree in business administration from the University of Miami and a bachelor's degree in chemical engineering from the University of Florida.RESTRICTED AND PERFORMANCE AWARD INCENTIVE PLANIn light of its conversion to a dividend paying corporation, Renegade is pleased to announce that it has implemented a restricted and performance award incentive plan (the "Incentive Award Plan") pursuant to which Renegade may provide incentive and performance based share awards of up to 10% of the outstanding Renegade Shares (less outstanding options) to employees, officers, directors and service providers. All such awards will vest in equal one-third increments on each anniversary of the grant. Renegade anticipates putting the Incentive Award Plan before its shareholders for approval at its next meeting of shareholders.OUTLOOKRenegade is pleased to announce that is has achieved its previously announced 2012 exit guidance of 8,000 boe/d. Renegade expects to release its 2013 capital expenditure plans in January 2013.CORPORATE INFORMATIONRenegade's common shares trade on the TSX Venture Exchange under the symbol "RPL". Renegade has approximately 202.5 million common shares outstanding and 214.0 million fully-diluted common shares. Renegade is also pleased to announce that it has updated its corporate presentation which is available at www.renegadepetroleum.com. READER ADVISORIESForward-Looking StatementsThis press release contains forward-looking statements. More particularly, this press release contains forward-looking statements concerning the payment and amount of dividends and Renegade's goals related thereto, the characteristics of the Acquired Assets, matters related to share awards and other similar matters.The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including, with respect to dividends, the board of director's assessment of Renegade's outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant, including applicable restrictions that may be imposed under the Credit Facility and on the ability of the Corporation to pay dividends.Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade cannot give any assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures). The forward-looking statements contained in this document are made as of the date hereof and Renegade is not under any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Please refer to Renegade's Annual Information Form dated April 27, 2012 and Renegade's (final) short form prospectus dated November 9, 2012 for additional risk factors relating to Renegade, both of which are available for viewing on www.sedar.com. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the plan of arrangement and financing described herein have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.DividendsThe payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and will depend on the board of director's assessment of Renegade's outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant at such future time. The amount of future cash dividends, if any, may also vary depending on a variety of factors, including fluctuations in commodity prices and differentials, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates.ConversionThe term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/bbl.) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.FOR FURTHER INFORMATION PLEASE CONTACT: Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Contact Information: Renegade Petroleum Ltd.Michael EricksonPresident & CEO(403) 355-8922Renegade Petroleum Ltd.Alex WylieVice-President, Finance & CFO(403) 410-3376